The first phase of a business alliance between the U.S. Postal Service and FedEx Corp. began yesterday with the activation of FedEx drop boxes at 82 post office locations throughout the Charlotte, NC, area.
In January, the USPS and FedEx Corp., Memphis, TN, entered into two seven-year shipping agreements worth a total of about $7 billion.
Under terms of one agreement, FedEx Express will have the option of placing self-service drop boxes in every USPS location. FedEx will pay the USPS between about $126 million and about $232 million in fees over the next seven years for this ability.
Fort Lauderdale, FL, will serve as the second test market beginning in April. FedEx plans to begin the national rollout of the drop-box program in July and, over 18 months, expects to place more than 10,000 drop boxes at post offices in about 120 metropolitan areas.
“Each day some 7 million customers go to one of our 38,000 postal outlets nationwide,” said Pam Gibert, vice president of retail consumer and small business at the USPS. “The alliance gives FedEx Express the opportunity to offer their customers the convenience of dropping their FedEx packages into drop boxes located outside our post offices.”
David J. Bronczek, president/CEO of FedEx Express, said Charlotte was chosen as the city to launch the alliance because “Charlotte is home to a wide range of companies, including more than 20,000 small businesses.”
In addition, Charlotte is the base for many companies in various high-growth sectors, including healthcare, telecommunications, manufacturing, retail, banking, textiles and finance. The region's hi-tech and information technology segments are growing rapidly, representing one of the largest growth sectors along with manufacturing. Charlotte also ranks fifth in the nation for new and expanded distribution operations.
After the initial implementation, the postal service may make similar arrangements with other overnight shippers.
The drop-box program will expand the FedEx network of drop-off locations, which allows customers to deposit FedEx Express packages at about 36,000 self-service drop boxes plus 1,214 staffed FedEx World Service Centers and 8,001 staffed FedEx Authorized ShipCenters nationwide. The FedEx retail network serves more than 20 million customers each year.
FedEx and the USPS have also executed an air transportation agreement that will launch in August. FedEx Express will provide airport-to-airport movement of containers holding USPS Priority Mail, Express Mail and First-Class mail. FedEx Express will provide air transportation for about 3.5 million pounds of Priority Mail, Express Mail and First-Class mail each business day — the equivalent of about 30 wide-body DC10 aircraft filled with USPS shipments.
The USPS will pay FedEx $6.3 billion over the next seven years for shared access to the FedEx Express national air transportation network. The alliance is expected to save the USPS $1 billion in transportation costs over the length of the contract.